Chief Investment Officer at Mudrick Capital Management LP (a hedge fund with over $1.2 billion in assets under management)
Jason Mudrick was on
Bloomberg recently to talk about the “massive opportunity” he finds in distressed issues.
Related Link: Blackstone Group Raising Fund To Acquire Distressed Energy Assets
Does Oil Excite You?
“Oil is the most exciting thing to hit our market since the 2008-09 timeframe. It’s a massive opportunity,” Mudrick said.
Where Do You Find Opportunities In Oil?
“High yield energy related companies have been the biggest issuers of high yield credit for the last three years,” Mudrick replied.
“It’s about 1/6th of the high yield market. High yield market in North America is about 1.2 trillion. 200 billion of those issues are related to energy companies. Leveraged loans, depends on who you talk to and how you think about unfunded revolvers, but probably another 200 billion.”
“So, you are talking about 400 billion of paper issued by companies who saw their end product going down by 50 percent. I mean, this is a massive opportunity for us.”
Related Link: Which Oil Majors Have The Highest Correlation To Oil?
How Far Oil Had To Drop Before You Got Interested?
“We started devoting resources to it in the fourth-quarter; we significantly stepped up our efforts in January,” Mudrick answered.
“I had six people down at Houston for weeks. The team's heading back down Houston in March. We have been to six cities and over 80 meetings.”
He continued, “We are throwing a lot of resources at it. We are not stopping what we are doing in the rest of the world, because there’s lots of interesting leveraged buyout capital structures that don’t work, which has been our bread and butter. But energy is very interesting.”
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